CFPB revamp assailed; Walmart expands money transfers
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Game changer: The Consumer Financial Protection Bureau would be subject to oversight by Congress and the executive branch under a “sweeping plan” unveiled by the agency’s acting director Mick Mulvaney on Monday. “The changes would be a major departure from the CFPB’s current structure, which gives it broad latitude to oversee consumer financial products without interference from Congress or the White House,” the Wall Street Journal notes. Mulvaney is expected to testify before the Senate Banking Committee next week. Wall Street Journal, New York Times, American Banker here and here
Wall Street Journal
Squeeze play: Credit card, auto and other lenders are making it harder for some consumers to borrow money, according to Cantor Fitzgerald.
Look to the Sky: GreenSky, a fintech startup that operates an online lending platform, is looking to raise $1 billion in an initial public offering that could come to market in the next few months. “While Wall Street investors have been wary” of lending startups because of high loan defaults, “GreenSky’s business model has clear distinctions,” the paper notes. Unlike companies like LendingClub and On Deck Capital, which have had problems, GreenSky doesn’t make loans directly to borrowers. Rather, it arranges loans through thousands of merchants and service providers, while a network of banks, including Fifth Third, SunTrust and Regions Financial, fund the loans and hold them in portfolio.
May I help you?: Allstate’s 350 call center employees are using the company’s AI-powered digital assistant Amelia to help them resolve customer issues quicker and more efficiently. Since it was introduced last September, the chatbot has helped the insurance company’s reps handle more than three million customer calls. “Allstate is among several major insurers using chatbots for employee and customer support as a way to innovate and compete with smaller, insurance-focused startups,” the paper says.
Tomorrow, the world: Furthering its “slow but steady push into financial services,” Walmart is expanding its money transfer service to 200 countries. Customers will now be able to send money from Walmart’s 5,000 U.S. stores to locations abroad within 10 minutes. The partnership with MoneyGram is set to begin this month.
At the same time, Western payments companies, like PayPal and MasterCard, seek a bigger foothold in Asian markets.
See you in court: A federal judge has granted class action status to a lawsuit by four former Goldman Sachs employees who claim the bank discriminates against women in pay and promotions. The class action certification, which was approved by U.S. District Court Judge Analisa Torres in Manhattan, covers more than 2,000 female associates and vice presidents who have worked in Goldman’s three main revenue-producing divisions as far back as July 2002. The lawsuit was originally filed in 2010.
Pride and decline: “Personality differences are the symptom not the cause” of recent difficulties at Deutsche Bank, where chairman Paul Achleitner has reportedly started looking for a replacement for CEO John Cryan. While internal divisions aren’t unusual at large banks, “they matter at Deutsche Bank because of its significance to Germany and to European banking,” the paper says. “Deutsche is a potent symbol. Its global expansion before the 2008 crisis was a source of pride and its decline since then hurts.”
Growing apart: Barclays plans to become the first British bank to launch a so-called “ringfenced” bank on Tuesday that it is calling “the biggest banking start-up ever.” Among other things, the process separates the bank’s consumer banking unit from its investment arm as well as dividing up services for larger corporations from small businesses. More than 24 million customer accounts and £250 billion in assets were transferred into the newly formed ringfenced bank, which will have its own board and capital requirements. The move “marks a milestone in the sector’s post-financial crisis reform efforts,” the paper says.
“The bureau is far too powerful, and with precious little oversight of its activities.” — Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, in his first semiannual report to Congress.